MILAN— Three of Italy's most powerful business empires — Fiat, Mediobanca and the Marzotto clothing group — will pool a range of activities to create a $5 billion-a-year conglomerate that could change the face of Europe's fashion and clothing industry.

In European terms, the move will produce, among its holdings, a clothing and fashion powerhouse that includes the manufacturers of such brands as Armani, Valentino, Hugo Boss and Fila.

But critics warned over the weekend that in Italian terms, the deal may be an attempt by Mediobanca, the secretive Milan merchant bank, to place under one roof an array of assets that represents more a power play than a group based on a coherent industrial strategy.

Separately, executives of some of the designer houses that would be grouped under the new entity worried that the merger would create a corporate juggernaut that could hurt quality con-trol and flatten smaller fashion houses.

Giovanni Agnelli, the honorary president of Fiat, called the creation of the new Gruppo Industriale Marzotto "an excellent deal" and said: "I am sure this huge clothing and publishing group is in a position to do very well."

Nearly two-thirds of the new conglomerate will be in the fashion and textiles sector. But the company will also control the Rizzoli Corriere della Sera newspaper and book-publishing business and will have investments in the Pirelli tire business, in metallurgy, pulp and paper, household furnishings, and banks including a 0.7 percent equity stake in Mediobanca itself.

The leading shareholders of GIM will be Fiat, with 17.3 percent; Marzotto, with 12.4 percent, and Mediobanca, with 10.5 percent.

While Pietro Marzotto, chairman of the new group, hailed the merger as having assembled "a very important fashion group with great synergies, which will encourage product development and research into new materials," critics were less sanguine.

"The move is not justified by any industrial plan, " said Walter Cerfeda, an official of the CGIL trade union.

Natale Forlani of the CISL, another union group, said, "The merger is aimed at perpetuating the old balance of power."

The new group said it would have annual revenue of 8.2 trillion lire ($4.83 billion), a net profit of 253 billion lire, with a work force of 21,000 people.

Some critics suggested that the new group, which will start with 1 trillion lire of cash resources, might aim to secure large stakes in Italian state-controlled groups that are slated for privatization. These include the telecommunications giant Società Finanziaria Telefonica, or STET, and its subsidiary Telecom Italia.

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Fiat and Mediobanca were stopped a little more than a year ago in a previous effort to create a conglomerate that would have combined the Rizzoli Corriere della Sera group and other assets of the Fiat-controlled Gemina group with the Ferruzzi chemicals and agriculture group. That deal foundered amid complaints from minority shareholders, an investigation of Gemina executives by Milan prosecutors and problems with Italian stock-market regulators.

At a news conference Saturday in Milan, Maurizio Romiti said: "Today's is a different deal. In some ways it is a simpler one with a greater industrial emphasis."

Other commentators were more pointed. "They tried to do something like this with Gemina, but it did not work because it did not make much sense,"Anthony Mannaura, of the stock brokerage Milla and Co. told The Associated Press. "At least now they seem to have an industry-specific idea in mind."

Maurizio Romiti said Saturday the new group would focus on textiles and publishing. "These are different but not antithetical sectors," he said. He added that in the past, the owners of the Corriere della Sera group had also controlled textile interests.

Gruppo Marzotto is a leading Italian textile and apparel exporter, with consolidated sales that last year amounted to 2.2 trillion lire. Its clothing brands include women's and men's lines for designers Gianfranco Ferre and Missoni, as well as Hugo Boss and Marlboro Classics sportwear.

The new group, through its Fiat parentage, will contain Gemina's fashion empire, the most celebrated part of which is Gruppo Finanziario Tessile, or GFT. It spotted early on the potential in designer labels and in the 1980s was instrumental in building the empires of Armani, Emanuel Ungaro and Valentino. Armani is the cash cow of the designer operations, some of which are believed to be losing money.

Maurizio Romiti said Saturday that Armani's licenses represented 420 billion lire a year and accounted for 30 percent of GFT's licensed designer lines, which is 55 percent of GFT's total business.

Pino Brusone, managing director of Armani, said Sunday, as the designer was preparing to show his fall-winter collection, that discussions were continuing about the renewal of the men's and women's contracts, and that it was possible that Armani would decide to manufacture these lines through its own factories, as it did with its jeans and Emporio Armani lines. GFT business accounted for only 20 percent of Armani's 2.2 trillion lire sales.

"We feel positive about this huge new clothing company," he said, "but it is a strategic decision whether to renew the contracts, and that decision has not yet been taken."

Another Armani executive said his company was concerned that the "huge juggernaut" represented by the new group might be unwieldy and slower to respond to demands of the ever-changing fashion business. He said Armani favored smaller manufacturing units to control quality.

The Marzotto merger was perceived by Armani as a maneuver in the global financial market, rather than a response to any industry need for a clothing giant, according to company executives.

Other industry sources expressed anxieties that the merger and subsequent trimming of the work force would make Gruppo Marzotto a tough competitor, at a time when a strong lire was already forcing fashion companies to reduce their margins in order to keep up export levels. They were also concerned that Marzotto's huge vertically-integrated operation, from yarn to fashion store, would wield enormous power and might flatten smaller businesses.

But Santo Versace, manager of the Gianni Versace company, saw the Marzotto deal as positive for the industry. "It is the way of the future to have these big groups, but it all depends on their strategy," he said. "Pietro Marzotto is a fantastic manager, and if the operation is in his hands, it will be good for the business."